Hoax, Sham, Stampede

May 29, 1986|By White

'I just think it's going to be a hoax to think if we come out and do one thing or another your insurance premiums are going to go down.''

That was Senate President Harry Johnston back in April, expressing his skepticism about proposed changes in the civil justice system. He stated the problem fairly: Evidence is slim or non-existent that limiting citizens' rights to collect money in lawsuits will affect insurance rates much. Yet Florida legislators are rushing to change the law anyway.

Maryland doctors already have learned the hard truth that there's little connection between limiting rights and lowering insurance premiums. In April their state's Legislature slapped a limit of $350,000 on court awards for non- economic damages, such as pain and suffering. Did the rates doctors pay for malpractice insurance go down as a consequence? No way.

Recently, the company that writes most of the business in Maryland informed doctors that it would increase their rates 50 percent, with the possibility that more increases might follow. And what about the much- ballyhooed limit on awards? That supposedly saved doctors 6 percent, because the company would have raised rates by 56 percent without the limit. Think about it: A lousy 6 percent saved in return for denying people with horrible injuries the right to collect more than $350,000 for a lifetime of suffering.

Would companies writing business in Florida be more generous to the doctors in return for a limit on damages and other changes in the law? Listen to what St. Paul Fire and Marine Insurance Co. had to say about that last week: ''It's a long way from theory to reality. There's no way at this time to know whether savings will actually occur and if so, how much.''

No way to know? That didn't stop the insurance industry's lobbyists -- with strong support from allies in business and medicine -- from mounting a legislative campaign on this so-called theory. The reality is that they've now stampeded Florida legislators into demanding restrictions on citizens' rights out of a misplaced faith that rates will come tumbling down. You were right, Sen. Johnston, this is a hoax, a sham.

''My concern, frankly, with doing something is that I'm not sure we know what to do.''

That was Rep. Sam Bell talking at the start of the session. He's chairman of the House Appropriations Committee, which approved a bill that gives the insurance and business lobbyists most of what they wanted. The House later passed that bill, setting up the present conflict with the Senate, whose version of reform is much tougher on the insurance industry. The Senate would roll back rates to 1984 amounts in return for a limit of $500,000 on non- economic damages and other changes. Leaders must now reconcile those two versions before a final bill can win passage.

In that same House bill, the committee also gutted Insurance Commissioner Bill Gunter's plan to regulate insurance companies more tightly -- a reform that really could do something about the wild cyclical swings in insurance rates. This led Mr. Gunter in anguish to ask how legislators could take away people's rights without ensuring some saving for policyholders.

Rep. Bell didn't answer that question. For all his concern, he and other leaders couldn't stop the stampede of the rank-and-file lawmakers. Instead, they started running to get out front and ''lead,'' though there has been no new evidence that changing the civil justice system will make much difference on rates.

Rep. Bell had a good idea before he heard the galloping hoofs coming: appoint a disinterested committee to study the legal system for a year. Let it learn from other states' mistakes before recommending any changes for Florida. But the doctors who marched on the Capitol by the thousands would have none of that good sense. Instead, they demanded immediate action, such as restricting non-economic damages to no more than $250,000, though an author of a study the Florida Medical Association sponsored says flatly he has seen no evidence the limit would slow down insurance rates.

You were right to worry, Rep. Bell. Now it's time you, Senate President Johnston and the other leaders headed off the stampede. Before changing the legal system, at least wait until the facts are in.